Understanding your brand’s ecosystem

Your brand, if it has any depth or breadth at all, can be seen as an ecosystem of sorts–an inter-related set of processes, relationships and perceptions that ultimately determine its relevance and health.

When you don’t see your brand as an ecosystem, and neglect to accept how you must co-evolve with your customers while fighting off hostile organisms, you miss emerging problems and nascent opportunities.

Witness Sears. When I joined in 1991, major appliances and home improvement products were king, defining the brand for most consumers and contributing an overwhelming majority of profits. Until Home Depot and Lowe’s emerged as major competitors the ecosystem we played in was a relatively straightforward one. Your appliance breaks, you get a new one. You need to hammer a nail, tighten a screw, cut some wood, we had the Craftsman tool for you.

Of course, the customer was always solution focused: as the old adage goes, you don’t buy a drill because you really want a drill, but because you really want a hole. When new brands emerged to address a broader set of needs, consumer wants became articulated as home solutions–kitchen remodel, new home construction, DIY projects and the like. The Sears (and Kenmore and Craftsman) brand needed to evolve as well. But didn’t.

During the nineties we worked hard to improve within our narrowly defined ecosystem (existing product focus, mall-based distribution), rather than see how the ecosystem was evolving. If we had truly understood and accepted the evolution of the ecosystem we had dominated for years, it would have been clear that we HAD to be in the home improvement warehouse business.

You know how this has played out. The fundamentally stronger organisms began to win out. Sears’ failure to participate meaningfully in the evolved ecosystem has doomed them to mediocrity at best; eventual demise in the most likely scenario.

Sears is just one high-profile case, but there are many other brands that have become extinct or largely irrelevant by neglecting to truly understand the ecosystem in which they live. Or die.

3 thoughts on “Understanding your brand’s ecosystem”

Interesting point. At the crucial time you reference – mid-nineties – my recollection is that it appeared to Sears that softlines was where the most growth (profit) was to be had, and that home improvement growth would follow as a normal course.
There were many missed opportunities for Sears to enter the big box environment at that time, however. Along with the planned expansion of Sears Hardware Stores through new store openings there was an active search for one or two big box retailers ready for acquisition by Sears. I recall making more than a few trips to evaluate the purchase potential of Scotty’s in Florida – Builder’s Emporium in the midwest and even the then-nascent Eagle Hardware based in Washington.
The result was the purchase of Orchard Supply Hardware and the failed attempt to create a national hardware store chain of mid-sized home improvement boxes which parenthetically coincided with Home Depot’s ‘Villager’s Hardware’ experimental concept of similarly-sized stores.
By that time, however the powers-that-be were already embarked on the supposedly more easy pickings offered by the “Great Indoors”.
All of which missed achieving a tipping point for one reason or another.

I remember in about 1991 Cliff Hooks was made VP of Facilities Planning. The real estate attorneys met with him. Tom Cahill pointed out that there weren’t many new regional malls being built and asked if we had any plans to build off the mall department stores. Hooks told him that he wouldn’t tell us how to practice law if we wouldn’t tell him how to expand the chain.

When Martinez was hired and there were rumors that Sears would buy Daytons, Hudsons and Fields, I suggested to Dave Raymond that Sears buy all of Dayton-Hudson, sell off Daytons, Hudsons and Fields, convert some Mervyns to Sears and sell the rest and then grow Target as much as possible. I think Sears had plenty of cash from spinning off Allstate, Dean Witter and Homart. Dave looked at me like I was crazy. I don’t know if they ever considered it, but it would have been interesting if they could executed it.